Good Afternoon and welcome to HotCopper’s the ASX Today for Monday of Week 10 of the year, I’m Jon Davidson, and if there was one big takeaway today, it’s that we perhaps didn’t suffer as badly as many might have thought on the ASX200 today, despite the US and Israel jointly kicking off a war in the Middle East.
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While I don’t mean to say Iran was a perfect nation by any means, it was pre-emptive strikes on the Shia petrostate that prompted Iran to begin firing missiles and drones at its Middle Eastern neighbours hosting US bases.
Kuwait, Qatar, and Jordan were all hit by Iranian missiles, and in the face of all of this, oil trading firms and shipping insurers have basically decided on an informal ban of shipping through the strait of Hormuz.
Depending on how long that goes on, oil prices could climb well above US$80 a barrel, but despite all of this, the XJO stuck around a drop of four tenths of a percent intraday.
Gold price reaction undersized?
At the time of writing, gold prices were only up around +1.5%, too, though this suggests that goldies had already priced in an Iranian war over the last two weeks. We’ve had plenty of forewarning from Washington.
Still, to this finance journalist at least, it’s a somewhat more subdued reaction than was expected. Also telling is that Betashares’ BBOZ bear ETF remains down -2% on a week by week basis.
Defence stocks predictably shone with Electro Optic Systems climbing back to near record highs; Droneshield too, but not anywhere near former peaks.
Oil price to suggest longevity
Oil will really be the big one to watch through the week as it will act as a barometer of how long the market expects this war to roll on.
Trump has overnight US time said it will be a four week operation, if that’s the case, that could mean that Brent Crude travels above US$90 a barrel, which could make things interesting for global inflation, especially considering the US Fed, and the RBA.
Anyway, as for Monday, not too much bloodshed, as long as you’re only talking metaphorically.
Looking around the traps: Karoon Energy was the winner of the day above other producing ASX energy stocks though perhaps only because it’s the cheapest serious contender; Bell Potter whacked a buy rating on Coles that saw some of its earnings losses pared back and Silver Mines Ltd climbed, reacting to an uptick in silver prices.
Curiously, 4D Medical also popped back above $4 a share, for reasons that are anybody’s guess.
That’s the ASX Today for Monday, I’m Jon Davidson, wish for peace and calm overnight and we’ll see you tomorrow, unless you’re a defence investor of course.
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